Confusion surrounding the difference between long-term income protection (sometimes referred to as permanent health insurance) and short-term income protection has plagued the market for years. Now with new products pushing the boundaries of one camp or the other, it is sometimes difficult to know what the best options are.
Despite the constant clash between long-term and short-term income protection, there are circumstances when they can work in harmony. But first, let’s be clear about the difference between the two products. Short-term income protection replaces a person’s net monthly income (often up to 75%) if they are unable to work due to accident, sickness or unemployment. The benefit period is for a contractual ‘short’ period of time, typically 12 months, but some newer, more flexible providers also offer benefit cover for three and six months. Short-term income protection is not a complex product ...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
